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Civil Investigative Demand: What to Expect in a Heightened Regulatory Environment

by admin on November 6, 2017 No comments

DOJ InvestigationBy: Matt Fischer

The United States Department of Justice (DOJ) has the power to issue civil investigative demand (CIDs) when the DOJ has reason to believe that a person may be in possession of information relevant to a false claims investigation.  The DOJ is empowered to serve CIDs by the False Claims Act (FCA).  A CID is similar to a grand jury subpoena; however, it provides greater versatility in the use of the information obtained.  In addition to requiring the production of documents similar to a grand jury subpoena, CIDs demand other types of discovery responses and the information gathered may be shared between the civil and criminal sides of an investigation.  Given this flexibility and with the passage of the Fraud Enforcement and Recovery Act of 2009 (which changed the law to allow issuance of a CID without the personal signature of the Attorney General), the DOJ has substantially increased its use of CIDs in the realm of healthcare law enforcement.    

CIDs, similar to a subpoena, permit the DOJ to gather documents and obtain information through other discovery tools such as interrogatories and depositions.  Justifiably, the receipt of a CID can cause serious unease because this indicates the initiation of a federal investigation of potential false claims.  To add to these concerns are the potential financial costs incurred in formulating a response and the possibility that company employees will be targeted.  In order to deal with this uncertainty, it is important to know what steps to take to lessen the impact of a CID.

Planning is Key

In this heightened regulatory environment, there are practical solutions a healthcare business can take to essentially comply with the CID’s demands and mitigate its impact.  Upon receipt, a healthcare business should first immediately consult an experienced attorney to assess the information requested, formulate a strategic response, and avoid taking any actions that might adversely affect the business’ standing in the eyes of the government.  During this process, the healthcare business should also take steps to preserve information in order to prevent the appearance of an attempt to impede an investigation.  Secondly, once counsel is retained, it is imperative to reach out early to the assigned Assistant U.S. Attorney (AUSA) to establish a dialogue and attempt to narrow the scope of information sought.  By limiting the scope, it will lessen the financial strain and also provide valuable insight on the true focus of the investigation.  In addition, it is best to reach an agreement for rolling document production.  Especially for companies with multiple locations, this will ease the burden of hard deadlines and permit flexibility to avoid unnecessary costs.

CIDs normally also require interrogatory answers and depositions.  Interrogatories will be attached to the CID as an exhibit and request specific information.  For example, common interrogatories will ask a company to identify all individuals involved in the billing of claims or to explain current and past billing procedures and policies.  If depositions are required, the deposition will occur at a location of DOJ’s choosing which will require the witness to read and approve the deposition transcript.

The realization of possible violations of the False Claims Act can trigger a variety of concerns.  However, a healthcare business or practice can be proactive in responding to a civil investigative demand.  Credibility is key.  At the beginning of an investigation a company will start out in the hole and must overcome an initial presumption of wrongdoing.  Through cooperation and integrity, combined with limiting the scope of inquiry, a healthcare business can focus on complying with a CID as efficiently as possible while protecting the company’s reputation.

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